PRINTER'S NO. 2569
No. 1870 Session of 2007
INTRODUCED BY STURLA, DeLUCA, EACHUS, DERMODY, DeWEESE, McCALL,
SURRA AND WALKO, OCTOBER 3, 2007
REFERRED TO COMMITTEE ON INSURANCE, OCTOBER 3, 2007
AN ACT
1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An
2 act relating to insurance; amending, revising, and
3 consolidating the law providing for the incorporation of
4 insurance companies, and the regulation, supervision, and
5 protection of home and foreign insurance companies, Lloyds
6 associations, reciprocal and inter-insurance exchanges, and
7 fire insurance rating bureaus, and the regulation and
8 supervision of insurance carried by such companies,
9 associations, and exchanges, including insurance carried by
10 the State Workmen's Insurance Fund; providing penalties; and
11 repealing existing laws," providing for accessibility to
12 affordable health insurance coverage for previously uninsured
13 individuals and for small businesses; adding definitions;
14 providing for subsidized health care, for outreach, for
15 Federal waivers and for expiration; and making a repeal.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. The act of May 17, 1921 (P.L.682, No.284), known
19 as The Insurance Company Law of 1921, is amended by adding an
20 article to read:
21 ARTICLE XXV
22 ADULT HEALTH CARE
23 SUBARTICLE A
24 PRELIMINARY PROVISION
1 Section 2501. Short title of article.
2 This article shall be known and may be cited as the Cover All
3 Pennsylvanians (CAP) Act.
4 Section 2502. Legislative findings and intent.
5 The General Assembly finds and declares as follows:
6 (1) Health care costs have been increasing twice as fast
7 as average wages in this Commonwealth. At the same time as
8 health care costs are skyrocketing and nearly 1,000,000
9 Pennsylvanians remain uninsured, billions of dollars are paid
10 each year in this Commonwealth in avoidable health care
11 costs.
12 (2) The large number of uninsured workers in this
13 Commonwealth has a negative impact on this Commonwealth's
14 economy and productivity because insured workers are
15 healthier and more productive and use fewer sick days. The
16 Commonwealth should play a role in making health care
17 coverage affordable for small businesses and for uninsured
18 individuals.
19 (3) The health care crisis is of national concern, but
20 it is possible to create a solution in this Commonwealth that
21 reduces the cost of health care and improves the well-being
22 of Pennsylvania's residents by addressing the fundamental
23 issues of affordability, accessibility and quality.
24 (4) The cost for covering the uninsured results in
25 increased premiums for businesses and labor groups.
26 (5) The Commonwealth has a clear interest in ensuring
27 that Pennsylvania families and small employers can afford
28 health insurance.
29 Section 2503. Definitions.
30 The following words and phrases when used in this article
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1 shall have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Adult basic." The health investment insurance program
4 established under Chapter 13 of the act of June 26, 2001
5 (P.L.755, No.77), known as the Tobacco Settlement Act.
6 "Average annual wage." The total annual wages paid by an
7 employer divided by the number of the employer's employees.
8 "Basic benefit package." The minimum health benefit
9 insurance plan determined by the Insurance Commissioner under
10 section 2520.
11 "Behavorial health services." Mental health or substance
12 abuse services.
13 "CAP contracts." The contracts entered into under section
14 2514.
15 "CAP Fund." The restricted account established under section
16 2512.
17 "Children's Health Insurance Program" or "CHIP." The
18 Children's Health Care Program established under Article XXIII.
19 "Commissioner." The Insurance Commissioner of the
20 Commonwealth.
21 "Commonwealth Attorneys Act." The act of October 15, 1980
22 (P.L.950, No.164), known as the Commonwealth Attorneys Act.
23 "Commonwealth average annual wage." The average annual wage
24 in this Commonwealth for a calendar year determined by the
25 Department of Labor and Industry under section 404(e)(2) of the
26 act of 1936, (1937 2nd Sp.Sess. P.L.2897, No.1), known as the
27 Unemployment Compensation Law.
28 "Commonwealth Documents Law." The act of July 31, 1968
29 (P.L.769, No.240), referred to as the Commonwealth Documents
30 Law.
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1 "Community Health Reinvestment Agreement." The Agreement on
2 Community Health Reinvestment entered into February 2, 2005, by
3 the Insurance Department and Capital Blue Cross, Highmark Inc.,
4 Hospital Service Association of Northeastern Pennsylvania and
5 Independence Blue Cross and published in the Pennsylvania
6 Bulletin at 35 Pa.B.4155.
7 "Contractor." A person with whom the Insurance Department
8 has entered into a contract for the purposes of subarticle B.
9 "Cover All Pennsylvanians" or "CAP." The health insurance
10 program established under this article.
11 "Department." The Insurance Department of the Commonwealth.
12 "Eligible employee enrollee." An individual who is 19 years
13 of age or older, is an employee of an eligible small low-wage
14 employer participant and has enrolled in CAP.
15 "Eligible individual." As follows:
16 (1) An individual who meets all of the following
17 criteria:
18 (i) Is at least 19 years of age but no older than 64
19 years of age.
20 (ii) Has been a resident of this Commonwealth at
21 least 90 days prior to enrollment in CAP.
22 (iii) Is ineligible to receive continuous
23 eligibility coverage under Title XIX or XXI of the Social
24 Security Act (49 Stat. 620, 42 U.S.C. § 301 et seq.),
25 except for benefits authorized under a waiver granted by
26 the United States Department of Health and Human Services
27 to implement CAP.
28 (iv) Meets one of the following:
29 (A) Is currently enrolled in the health
30 investment insurance program established under
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1 Chapter 13 of the act of June 26, 2001 (P.L.755,
2 No.77), known as the Tobacco Settlement Act, or is
3 wait-listed for the program on the effective date of
4 this section.
5 (B) Has a household income that is no greater
6 than 200% of the Federal poverty level at the time of
7 application and has not been covered by any health
8 insurance plan or program for at least 90 days
9 immediately preceding the date of application, except
10 that the 90-day period shall not apply to an
11 individual who meets one of the following:
12 (I) Is eligible to receive benefits under
13 the act of December 5, 1936 (1937 2nd Sp.Sess.
14 P.L. 2897, No.1), known as the Unemployment
15 Compensation Law.
16 (II) Was covered under a health insurance
17 plan or program provided by an employer but at
18 the time of application is no longer covered
19 because of a change in the individual's
20 employment status and is ineligible to receive
21 benefits under the Unemployment Compensation Law.
22 (III) Lost coverage as a result of divorce
23 or separation from a covered individual, the
24 death of a covered individual or a change in
25 employment status of a covered individual.
26 (IV) Is transferring from another
27 government-subsidized health insurance program,
28 including as a result of failure to meet income
29 eligibility requirements.
30 (C) Has a household income that is greater than
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1 200% of the Federal poverty level and has not been
2 covered by any health insurance plan or program
3 during the 180 days immediately preceding the date of
4 application, except that the 180-day period shall not
5 apply to an individual who meets one of the
6 following:
7 (I) Is eligible to receive benefits under
8 the Unemployment Compensation Law.
9 (II) Was covered under a health insurance
10 plan or program provided by an employer but at
11 the time of application is no longer covered
12 because of a change in the individual's
13 employment status and is ineligible to receive
14 benefits under the Unemployment Compensation Law.
15 (III) Lost coverage as a result of divorce
16 or separation from a covered individual, the
17 death of a covered individual or a change in
18 employment status of a covered individual.
19 (IV) Is transferring from another
20 government-subsidized health insurance program,
21 including as a result of failure to meet income
22 eligibility requirements.
23 (2) If an individual who otherwise meets the definition
24 in paragraph (1) is attending an institution of higher
25 education in this Commonwealth, the individual shall be
26 required to meet the domiciliary requirements of 22 Pa. Code
27 Ch. 507 (relating to finance and administration) prior to
28 enrollment in CAP.
29 "Eligible individual enrollee." An eligible individual who
30 is enrolled in CAP. The term does not include an eligible
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1 employee enrollee.
2 "Eligible small low-wage employer." An employer that meets
3 all of the following:
4 (1) Has at least two, but not more than 50 full-time
5 equivalent employees.
6 (2) Has not offered health care insurance through any
7 plan or program during the 180 days immediately preceding the
8 date of application for participation in CAP.
9 (3) Pays an average annual wage that is less than the
10 Commonwealth average annual wage.
11 (4) Will enroll in CAP at least 75% of all of its
12 employees who work 20 hours or more per week.
13 "Eligible small low-wage employer participant." An eligible
14 small low-wage employer who is participating in CAP.
15 "Employee." Any individual whose wages an employer is
16 required under the Internal Revenue Code of 1986 (Public Law 99-
17 514, 26 U.S.C. § 1 et. seq.) to withhold Federal income tax.
18 "Employer." The term shall include:
19 (1) Any of the following who or which employ one or more
20 employees to perform services for remuneration for any
21 period of time:
22 (i) An individual, copartnership, association,
23 domestic or foreign corporation or other entity.
24 (ii) The legal representative, trustee in
25 bankruptcy, receiver or trustee of any individual,
26 copartnership, association or corporation or other
27 entity.
28 (iii) The legal representative of a deceased
29 individual.
30 (2) Individuals who are self-employed.
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1 (3) The executive, legislative and judicial branches of
2 the Commonwealth and any of its political subdivisions.
3 "Enrollee." An eligible employee enrollee or an eligible
4 individual enrollee, as the context may require.
5 "Fair share tax." The tax imposed under section 2541.
6 "Fiscal year." A period of 12 consecutive calendar months
7 commencing with July 1.
8 "Hospital plan corporation." A not-for-profit corporation
9 operating under the provisions of 40 Pa.C.S. Ch. 61 (relating to
10 hospital plan corporations).
11 "Institution of higher education." A public or private two-
12 year or four-year college, university or postbaccalaureate
13 program.
14 "Insurer." A company or health insurance entity licensed in
15 this Commonwealth to issue any individual or group health,
16 sickness or accident policy or subscriber contract or
17 certificate or plan that provides medical or health care
18 coverage by a health care facility or licensed health care
19 provider that is offered or governed under this act or any of
20 the following:
21 (1) The act of December 29, 1972 (P.L.1701, No.364),
22 known as the Health Maintenance Organization Act.
23 (2) The act of May 18, 1976 (P.L.123, No.54), known as
24 the Individual Accident and Sickness Insurance Minimum
25 Standards Act.
26 (3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
27 corporations) or 63 (relating to professional health services
28 plan corporations).
29 (4) Section 630 of this act.
30 (5) Article XXIV of this act.
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1 "Medical loss ratio." The ratio of incurred medical claim
2 costs to earned premiums.
3 "Offeror." A hospital plan corporation, professional health
4 service corporation or other insurer that submits a proposal in
5 response to the Insurance Department's solicitation of bids or
6 proposals issued under section 2514.
7 "Preexisting condition." A disease or physical condition for
8 which medical advice, diagnosis, care or treatment has been
9 recommended or received prior to the effective date of coverage.
10 "Prescription drug." A controlled substance, other drug or
11 device for medication dispensed by order of a health care
12 provider with prescriptive authority under the laws of this
13 Commonwealth.
14 "Prevailing Wage Act." The act of August 15, 1961 (P.L.987,
15 No.442), known as the Pennsylvania Prevailing Wage Act.
16 "Professional health service plan corporation." A not-for-
17 profit corporation operating under the provisions of 45 Pa.C.S.
18 Ch. 63 (relating to professional health services plan
19 corporations).
20 "Public Welfare Code." The act of June 13, 1967 (P.L.31,
21 No.21), known as the Public Welfare Code.
22 "Qualifying health care coverage." A health benefit plan or
23 other form of health care coverage that qualifies an employer
24 for the credit under section 2542.
25 "Regulatory Review Act." The act of June 25, 1982 (P.L.633,
26 No.181), known as the Regulatory Review Act.
27 "Tobacco Settlement Act." The act of June 26, 2001 (P.L.755,
28 No.77), known as the Tobacco Settlement Act.
29 "Unemployment Compensation Law." The act of December 5, 1936
30 (1937 2nd Sp.Sess. P.L. 2897, No.1), known as the Unemployment
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1 Compensation Law.
2 "Wages." All remuneration, including the cash value of
3 mediums of payment other than cash, paid by an employer to all
4 employees for services performed in this Commonwealth, including
5 amounts withheld from the employees' pay by the employer. The
6 term shall not include remuneration excluded from wages under
7 the provisions of the definition of "wages under section 4(x) of
8 the act of December 5, 1936 (1937 2nd Sp.Sess. P.L.2897, No.1),
9 known as the Unemployment Compensation Law, other than the
10 provisions of the definition of "wages" under section 4 (x)(1).
11 The term shall not exclude remuneration included in wages under
12 the provisions of the definition of "wages" under section 4
13 (x)(6) of the Unemployment Compensation Law.
14 SUBARTICLE B
15 (B) PRIMARY HEALTH CARE PROGRAM
16 Section 2511. Cover All Pennsylvanians health insurance
17 program.
18 (a) Establishment.--The Cover All Pennsylvanians health
19 insurance program is established within the department.
20 (b) Purpose.--The purpose of CAP is to assist certain small
21 business employers to cover their uninsured employees and to
22 provide access to affordable health insurance coverage for
23 uninsured adult Pennsylvanians.
24 (c) Administration.--The department shall administer CAP
25 under section 2514(1).
26 Section 2512. CAP Fund.
27 (a) Establishment.--There is established a restricted
28 account in the General Fund to be known as the CAP Fund.
29 (b) Sources.--The following are the sources of money for the
30 CAP Fund:
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1 (1) Appropriations to the fund.
2 (2) Money received from the Federal Government or other
3 sources.
4 (3) Money required to be deposited pursuant to other
5 provisions of this article or any other law of the
6 Commonwealth.
7 (4) Money received under subarticle C.
8 (5) Upon implementation of CAP:
9 (i) Money appropriated for adult basic under section
10 306(b)(1)(vi) of the Tobacco Settlement Act.
11 (ii) Money required to be dedicated to adult basic
12 or any alternative program to benefit persons of low-
13 income under the Community Health Reinvestment Agreement
14 within the respective service areas for each party to
15 that agreement. Money under this subparagraph shall only
16 be used to defray the cost of the subsidies approved
17 under section 2513(6).
18 (6) Returns on money in the fund.
19 (c) Appropriation.--Money in the fund is hereby
20 appropriated, upon approval of the Governor, to the fund to be
21 used exclusively for the implementation and administration of
22 CAP.
23 Section 2513. Rates, premiums, discounts and subsidies.
24 Rates, premiums, discounts and subsidies for CAP shall be
25 determined in accordance with the following:
26 (1) Rates for CAP shall be approved annually by the
27 department and may vary by region and contractor. Rates shall
28 be based on actuarially sound and adequate review.
29 (2) Premiums for CAP:
30 (i) shall be established annually by the
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1 commissioner; and
2 (ii) may vary by region and contractor.
3 (3) Premiums to be paid by eligible small low-wage
4 employer participants and enrollees under this section shall
5 be increased by a factor no higher than the average of the
6 change in the medical care component of the Consumer Price
7 Index and the change in average wage for this Commonwealth as
8 determined by the Department of Labor and Industry.
9 (4) Except as set forth in paragraph (7), the premium
10 for eligible employee enrollees shall be discounted from the
11 amount established under paragraph (2) in an amount
12 determined annually by the commissioner. The premium discount
13 shall not exceed 30%. The following apply:
14 (i) An eligible small low-wage employer participant:
15 (A) shall pay at least 65% of the discounted
16 premium for each employee enrolled; and
17 (B) may pay more than 65% of the discounted
18 premium for each employee.
19 (ii) An eligible employee enrollee not receiving a
20 subsidy under paragraph (6) shall pay the balance of the
21 discounted premium.
22 (iii) An eligible small low-wage employer
23 participant shall sponsor a program that allows health
24 insurance premiums paid by its employees to be made on a
25 pretax basis and shall inform its employes of the
26 availability of the program. The program shall include
27 the following payments:
28 (A) that portion of the discounted premium less
29 applicable subsidies to be paid by its eligible
30 employee enrollees;
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1 (B) CAP premium paid for dependents of the
2 employees; and
3 (C) premiums paid by employees for CHIP.
4 (5) The premiums for eligible individual enrollees and
5 receiving subsidies under paragraph (6) shall be at the full
6 premium level.
7 (6) Subject to paragraph (7), an enrollee whose
8 household income is at or below 300% of the Federal poverty
9 level may apply to the department for a premium subsidy as
10 follows:
11 (i) The department shall review and approve
12 applications for subsidies under this paragraph.
13 (ii) Except to the extent that changes may be
14 necessary to meet Federal requirements or to encourage
15 eligible small low-wage employer participation or
16 enrollment by eligible individuals, subsidies for the
17 2007-2008 fiscal year are preliminarily estimated to
18 result in the following premium amount based on household
19 income:
20 (A) For an enrollee whose household income is
21 not greater than 100% of the Federal poverty level, a
22 monthly premium of $10.
23 (B) For an enrollee whose household income is
24 greater than 100% but not greater than 200% of the
25 Federal poverty level, a monthly premium of $40.
26 (C) For an enrollee whose household income is
27 greater than 200% but not greater than 300% of the
28 Federal poverty level, a monthly premium of $60.
29 (iii) For fiscal years beginning after June 30,
30 2008, the commissioner may establish different subsidy
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1 amounts and shall forward notice of the new premium
2 amounts to the Legislative Reference Bureau for
3 publication in the Pennsylvania Bulletin.
4 (iv) An enrollee who receives a subsidy under this
5 paragraph must do all of the following:
6 (A) Verify household income and household
7 composition with the department every six months.
8 (B) Notify the department in writing within 30
9 days of a change in household income or composition.
10 (7) The following apply:
11 (i) An enrollee who is paid the prevailing wage
12 while working on a public work project as required by the
13 Prevailing Wage Act, and who is otherwise entitled to a
14 subsidy under paragraph (6), shall be subject to a
15 reduction of the subsidy on a dollar-for-dollar basis for
16 every dollar paid to the enrollee as part of the
17 prevailing wage requirement which is allocable for use in
18 the purchase of health care benefits.
19 (ii) A small low-wage employer participant that has
20 a contract to perform work on a public work project
21 subject to the Prevailing Wage Act shall not be entitled
22 to the premium discount provided under paragraph (4)
23 during the term of the contract.
24 (8) The department shall freeze enrollment and establish
25 waiting lists to assure that the Commonwealth's costs to
26 implement and administer CAP do not exceed funds made
27 available for CAP.
28 (9) Notwithstanding any other provision of law to the
29 contrary, employer-based coverage may, in the commissioner's
30 sole discretion, be purchased in place of enrollment in CAP
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1 or may be purchased in conjunction with any portion of CAP
2 provided outside the scope of CAP contracts by the
3 Commonwealth paying the employee's share of the premium to
4 the employer if it is more cost effective for the
5 Commonwealth to purchase health care coverage from an
6 enrollee's employer-based program than to pay the
7 Commonwealth's share of a subsidized premium. This paragraph
8 shall apply to any employer-based program, whether individual
9 or family, such that if the Commonwealth's share of the
10 enrollee plus its share for any spouse under CAP or children
11 under CHIP is greater than the enrollee's premium share for
12 family coverage under the employer-based program, the
13 Commonwealth may choose to pay the latter alone or in
14 combination with providing any benefit the Commonwealth does
15 not provide through its CAP contracts.
16 Section 2514. Duties of department.
17 The department shall have the following duties:
18 (1) Administer CAP on a Statewide basis.
19 (2) Solicit bids or proposals and award contracts for
20 the basic benefit package through a competitive procurement
21 in accordance with 62 Pa.C.S. (relating to procurement) and
22 section 2515. The department may award contracts on a
23 multiple award basis as described in 62 Pa.C.S. § 517
24 (relating to multiple awards).
25 (3) Impose reasonable cost-sharing arrangements and
26 encourage appropriate use by contractors of cost-effective
27 health care providers who will provide quality health care by
28 establishing and adjusting copayments to be incorporated into
29 CAP by contractors. The department shall forward changes to
30 copayments to the Legislative Reference Bureau for
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1 publication in the Pennsylvania Bulletin. Changes shall be
2 implemented by contractors as soon as practicable following
3 publication, but in no event more than 120 days following
4 publication.
5 (4) Ensure that the eligibility of small low-wage
6 employer participants and enrollees receiving subsidies is
7 redetermined every six months.
8 (5) In consultation with other appropriate Commonwealth
9 agencies, conduct monitoring and oversight of contracts
10 entered into with contractors.
11 (6) In consultation with other appropriate Commonwealth
12 agencies, monitor, review and evaluate the adequacy,
13 accessibility and availability of services delivered to
14 enrollees.
15 (7) In consultation with other appropriate Commonwealth
16 agencies, establish and coordinate the development,
17 implementation and supervision of an outreach plan to ensure
18 that those who may be eligible are aware of CAP. The plan
19 shall include provisions for:
20 (i) reaching special populations, including nonwhite
21 and non-English-speaking individuals and individuals with
22 disabilities;
23 (ii) reaching different geographic areas, including
24 rural and inner-city areas; and
25 (iii) assuring that special efforts are coordinated
26 within the overall outreach activities throughout this
27 Commonwealth.
28 (8) At the request of an individual enrollee, facilitate
29 the payment on a pretax basis of premiums:
30 (i) for CAP and dependents covered under CAP; or
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1 (ii) if applicable, for CHIP.
2 (9) To establish penalties for persons who enroll in
3 CAP, drop enrollment and subsequently reenroll for the
4 purpose of avoiding the ongoing payment of premiums.
5 Section 2515. Submitting proposals and awarding contracts.
6 (a) Submission.--Each professional health service plan
7 corporation and hospital plan corporation and their subsidiaries
8 and affiliates doing business in this Commonwealth shall submit
9 a bid or proposal to the department to carry out the purposes of
10 this subarticle in the geographic area serviced by the
11 corporation. All other insurers may submit a bid or proposal to
12 the department to carry out the purposes of this subarticle.
13 (b) Review.--The department shall review and score the bids
14 or proposals on the basis of all of the requirements for CAP.
15 The department may include other criteria in the solicitation
16 and in the scoring and selection of the bids or proposals that
17 the department, in the exercise of its duties under section
18 2514, deems necessary. The department shall do all of the
19 following:
20 (1) Select, to the greatest extent practicable, offerors
21 that contract with health care providers to provide health
22 care services on a cost-effective basis. The department shall
23 select offerors that use appropriate cost management methods,
24 including the chronic care model, which will enable CAP to
25 provide coverage to the maximum number of enrollees.
26 (2) Select, to the greatest extent practicable, only
27 offerors that comply with all procedures relating to
28 coordination of benefits as required by the department and
29 the Department of Public Welfare.
30 (c) Term.--Contracts may be for an initial term of up to
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1 five years, with options to extend for five one-year periods.
2 Section 2516. Rates and charges.
3 (a) Medical loss ratio.--The medical loss ratio for a
4 contract shall be no less than 85%.
5 (b) Fee.--No enrollee shall be charged a fee by any person
6 as a requirement for enrolling in CAP.
7 Section 2517. Participation by eligible small low-wage
8 employers.
9 (a) Employer.--An eligible small low-wage employer seeking
10 to participate in the CAP program must do all of the following:
11 (1) Select and contact a contractor that services its
12 geographic area from a list of CAP contractors posted on the
13 department's CAP website or otherwise obtained from the
14 department upon request.
15 (2) Adequately inform employees of the opportunity to
16 enroll in CAP and the process for enrollment required by the
17 contractor.
18 (3) Comply with all other relevant provisions of this
19 article.
20 (b) Employees.--Eligible employee enrollees must do all of
21 the following:
22 (1) Comply with the application and other enrollment
23 requirements of the contractor.
24 (2) Pay the required premium.
25 Section 2518. Termination of employment.
26 An eligible employee enrollee who is terminated from
27 employment shall be eligible to continue participating in CAP if
28 the eligible employee enrollee continues to meet the
29 requirements of an eligible individual enrollee and pays any
30 increased premium required.
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1 Section 2519. Enrollment by eligible individuals.
2 An eligible individual seeking to purchase insurance through
3 CAP must do all of the following:
4 (1) Select and contact a contractor that services the
5 eligible individual's geographic area from a list of CAP
6 contractors posted on the department's CAP website or
7 otherwise obtained from the department upon request.
8 (2) Comply with the application and other enrollment
9 requirements of the contractor.
10 (3) Pay the required premium directly to the contractor.
11 (4) Comply with all other relevant provisions of this
12 article.
13 Section 2520. Basic benefit package.
14 (a) Benefits.--The basic benefit package to be offered under
15 CAP shall be of the scope and duration as the department
16 determines and shall provide for all of the following, which may
17 be limited or unlimited as the department may determine:
18 (1) Preliminary and annual health assessments.
19 (2) Emergency care.
20 (3) Inpatient and outpatient care.
21 (4) Prescription drugs, medical supplies and equipment.
22 (5) Emergency dental care.
23 (6) Maternity care.
24 (7) Skilled nursing.
25 (8) Home health and hospice care.
26 (9) Chronic disease management.
27 (10) Preventive and wellness care.
28 (11) Inpatient and outpatient behavioral health
29 services.
30 (b) Commonwealth election.--The Commonwealth may elect to
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1 provide any benefit independently and outside the scope of CAP
2 contracts.
3 (c) Enrollment.--Enrollment in CAP shall not be prohibited
4 based upon a preexisting condition, nor shall a CAP benefit plan
5 exclude a diagnosis or treatment for a condition based upon its
6 preexistence.
7 Section 2521. Data matching.
8 (a) Covered individuals.--All entities providing health
9 insurance or health care coverage within this Commonwealth
10 shall, not less frequently than once every month, provide the
11 names, identifying information and any additional information on
12 coverage and benefits as the department may specify for all
13 individuals for whom the entities provide insurance or coverage.
14 (b) Use of information.--The department shall use the
15 information obtained in subsection (a) to determine whether any
16 portion of an enrollee's premium is being paid from any other
17 source and to determine whether another entity has primary
18 liability for any health care claims paid under any program
19 administered by the department. If a determination is made that
20 an enrollee's premium is being paid from another source, the
21 department shall not make any additional payments to the insurer
22 for the enrollee.
23 (c) Excess payment.--If any payment has been made to an
24 insurer by the department for an enrollee for whom any portion
25 of the premium paid by the department is being paid from another
26 source, the insurer shall reimburse the department the amount of
27 any excess payment or payments.
28 (d) Reimbursement.--The department may seek reimbursement
29 from an entity that provides health insurance or health care
30 coverage that is primary to the coverage provided under any
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1 program administered by the department.
2 (e) Timeliness.--To the maximum extent permitted by law, and
3 notwithstanding any policy or plan provision to the contrary, a
4 claim by the department for reimbursement under subsection (c)
5 or (d) shall be deemed timely filed if it is filed with the
6 insurer or entity within three years following the date of
7 payment.
8 (f) Agreements.--The department is authorized to enter into
9 agreements with entities providing health insurance and health
10 care coverage for the purpose of carrying out the provisions of
11 this section. The agreements shall provide for the electronic
12 exchange of data between the parties at a mutually agreed upon
13 frequency, but no less than once every two months, and may also
14 allow for payment of a fee by the department to the entity
15 providing health insurance or health care coverage.
16 (g) Other coverage.--The department shall determine that no
17 other health care coverage is available to the enrollee through
18 an alimony agreement or an employment-related or other group
19 basis. If health care coverage is available, the department
20 shall reevaluate the enrollee's eligibility under this
21 subarticle.
22 (h) Penalty.--The commissioner may impose a penalty of up to
23 $1,000 per violation upon any entity that fails to comply with
24 the obligations imposed by this subarticle. All funds collected
25 under this subsection shall be deposited into the CAP Fund.
26 (i) Coordination.--The department shall coordinate with the
27 Department of Public Welfare in the implementation of this
28 subarticle and may designate the Department of Public Welfare to
29 perform the duties that are appropriate under this subarticle.
30 Section 2522. Information to be provided by insurers.
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1 (a) Written notification.--Each hospital plan corporation
2 and professional health services corporation shall provide an
3 individual in this Commonwealth who has applied for insurance
4 through its special care product with written information in
5 plain language about the existence of CAP, the benefits it
6 covers and the cost to the individual to purchase so that the
7 individual applying for insurance through special care can
8 compare the costs and benefits of it and CAP.
9 (b) Department review.--Each hospital plan corporation and
10 professional health services corporation shall develop written
11 materials which comply with subsection (a) and submit them to
12 the department for review and approval.
13 (c) Approval required.--Only materials approved by the
14 department under subsection (b) may be provided to applicants
15 for a special care product offered in this Commonwealth.
16 Section 2523. Regulations.
17 The department may promulgate regulations for the
18 implementation and administration of this subarticle.
19 Section 2524. Federal waivers.
20 The Department of Public Welfare, in cooperation with the
21 department, shall apply for all applicable waivers from the
22 Federal Government and shall seek approval to amend the State
23 plan as necessary to carry out the provisions of this article.
24 If the Department of Public Welfare receives approval of a
25 waiver or approval of a State plan amendment as required by this
26 section, it shall notify the department and shall transmit
27 notice of the waiver or State plan amendment approvals to the
28 Legislative Reference Bureau for publication as a notice in the
29 Pennsylvania Bulletin. The department is authorized to change
30 the benefits and the premium and copayment amounts payable under
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1 section 2513 in order for CAP to meet Federal requirements.
2 Section 2525. Federal funds.
3 Notwithstanding any other provision of law, the Department of
4 Public Welfare, in cooperation with the department, shall take
5 any action necessary to do all of the following:
6 (1) Ensure the receipt of Federal financial
7 participation under Title XIX of the Social Security Act (49
8 Stat. 620, 42 U.S.C. § 1396 et seq.) for coverage and for
9 services provided under this article.
10 (2) Qualify for available Federal financial
11 participation under Title XIX of the Social Security Act.
12 Section 2526. Entitlements and claims.
13 Nothing in this subarticle shall constitute an entitlement
14 derived from the Commonwealth or a claim on any funds of the
15 Commonwealth.
16 Section 2527. Option to limit or not to proceed.
17 Notwithstanding any other provisions of this subarticle, in
18 the event that Federal waiver requirements limit CAP to the
19 extent that only a portion of those individuals otherwise
20 eligible may be covered, the Commonwealth may limit CAP to that
21 portion or, at its option, determine not to proceed with the CAP
22 program.
23 SUBARTICLE C
24 FAIR SHARE TAX
25 Section 2541. Imposition of tax.
26 In order to help fund the Commonwealth's cost of implementing
27 and administering CAP, each employer shall be subject to a fair
28 share tax as follows:
29 (1) For fiscal years 2007-2008 through 2009-2010, 3% of
30 the wages paid by the employer.
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1 (2) For fiscal years commencing after June 30, 2010,
2 3.5% of the wages paid by the employer.
3 Section 2542. Credits against tax.
4 (a) Reduction.--For fiscal years 2007-2008 through 2011-
5 2012, the amount of the fair share tax to which an employer is
6 otherwise subject may be reduced by the amount of a quarterly
7 start-up credit as follows:
8 (1) Fiscal year 2007-2008, $15,000.
9 (2) Fiscal year 2008-2009, $12,000.
10 (3) Fiscal year 2009-2010, $9,750.
11 (4) Fiscal year 2010-2011, $7,700.
12 (5) Fiscal year 2011-2012, $3,981.25.
13 (6) Fiscal year 2012-2013 and thereafter, $0.
14 (b) Entitlement.--The following apply:
15 (1) An employer that offers qualifying health care
16 coverage to each of its employees who work 30 hours per week
17 or more following no more than 90 days of continued
18 employment shall be entitled to a credit against the fair
19 share tax in an amount equal to 3% of the employer's wages
20 for fiscal years 2007-2008 through 2009-2010, and 3.5% of the
21 employer's wages for fiscal years commencing after June 30,
22 2010.
23 (2) The Department of Labor and Industry, in
24 consultation with the department, shall determine whether the
25 employer's offer shall be considered as qualifying health
26 care coverage based on the premium and out-of-pocket costs to
27 the employee and the level of employee participation. In the
28 case of multiple plans offered by the same employer, the
29 determination shall be based on the cost to the lowest wage
30 employees of the employer and the relative participation of
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1 those employees.
2 (c) Amount.--The total amount of credits under this section
3 shall not exceed the amount of fair share tax imposed under
4 section 2541 for the year the credit is granted.
5 (d) Limitations.--The credits under this section may not be
6 carried back or carried forward to other years, refunded,
7 assigned or sold.
8 Section 2543. Reports by employers.
9 (a) General rule.--If an employer's liability for fair share
10 tax for a calendar quarter, determined without regard to section
11 2542(b), exceeds the amount of credit available to the employer
12 pursuant to section 2542(a) for that calendar quarter, the
13 employer shall file a report with the Department of Labor and
14 Industry for that calendar quarter. The report shall be due by
15 the last day of the month immediately following the calendar
16 quarter. The report shall be made in a manner prescribed by the
17 Department of Labor and Industry and shall contain all
18 information required by the Department of Labor and Industry,
19 including the following:
20 (1) The amount of wages paid by the employer during the
21 calendar quarter.
22 (2) A certification that the employer did or did not
23 satisfy the requirements for the credit under section 2542(b)
24 throughout the calendar quarter.
25 (b) Other reports.--Each employer shall file any other
26 reports required by the Department of Labor and Industry in the
27 administration of this subarticle, which reports shall be made
28 in the manner prescribed by the Department of Labor and Industry
29 and contain all information required by the Department of Labor
30 and Industry.
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1 Section 2544. Payment of tax.
2 Concurrently with each report required under section 2543,
3 the employer shall pay to the Department of Labor and Industry
4 the amount of fair share tax imposed under this subarticle for
5 the period covered by the report.
6 Section 2545. Penalties.
7 (a) Failure to make or file report.--An employer that does
8 not make and file the periodic reports required by section 2543
9 in the manner prescribed by the Department of Labor and Industry
10 on or before the date the report is required to be filed shall
11 pay a penalty.
12 (b) Amount.--The amount of the penalty under subsection (a)
13 shall be 10% of the amount of fair share tax due for the period
14 and shall not be less than $50 or more than $5,000.
15 (c) Deposit.--All penalties collected under this section
16 shall be deposited into the CAP Fund.
17 Section 2546. Interest.
18 (a) Interest.--Fair share taxes or penalties unpaid on the
19 date on which they are due and payable shall bear interest at
20 the greater of:
21 (1) one-twelfth of the annual rate determined by the
22 Secretary of Revenue under section 806 of the act of April 9,
23 1929 (P.L.343, No.176), known as The Fiscal Code, per month
24 or fraction of a month; or
25 (2) the rate of 0.75% per month or fraction of a month
26 from the date they become due until paid.
27 (b) Deposit.--All interest collected under this section
28 shall be deposited into the CAP Fund.
29 Section 2547. Refunds.
30 (a) Credit or refund.--If an employer applies for refund or
20070H1870B2569 - 26 -
1 credit of any amount paid as fair share tax, interest or
2 penalties and the Department of Labor and Industry determines
3 that the amount, or any portion thereof, was erroneously
4 collected, the Department of Labor and Industry may, at its
5 discretion, either allow a credit without interest against
6 subsequent fair share tax payments or shall refund from the CAP
7 Fund, without interest, the amount erroneously paid.
8 (b) Application.--No refund or credit shall be allowed with
9 respect to a payment as fair share tax, interest or penalties,
10 unless the employer files an application on or before the later
11 of:
12 (1) one year from the date on which such payment was
13 made; or
14 (2) four years from the reporting due date of the
15 reporting period with respect to which the payment was made.
16 (c) Department of Labor and Industry.--For a like cause and
17 within the same period, a refund may be made or a credit allowed
18 on the initiative of the Department of Labor and Industry.
19 Section 2548. Collections and enforcement.
20 (a) Records open to inspection.--Records maintained by
21 employers pursuant to section 206(a) of the Unemployment
22 Compensation Law and corresponding regulations shall be open to
23 inspection by the Department of Labor and Industry for purposes
24 of this subarticle to the same extent that they are open to
25 inspection for purposes of the Unemployment Compensation Law.
26 (b) Application of Unemployment Compensation Law.--The
27 provisions of sections 304(a), (b) and (d), 305(c), 308.1, 309
28 and 309.2 of the Unemployment Compensation Law are incorporated
29 into this subarticle and shall be applicable to the fair share
30 tax, interest and penalties. References in these provisions of
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1 the Unemployment Compensation Law to contributions shall be
2 deemed to be references to the fair share tax for purposes of
3 this subarticle.
4 Section 2549. False statements and representations and other
5 offenses.
6 (a) Offense.--An employer, whether or not liable for the
7 payment of fair share taxes under this subarticle, or an officer
8 or agent of an employer or any other person who does any of the
9 following commits a summary offense and shall, upon conviction,
10 be sentenced to pay a fine of not less than $100 nor more than
11 $1,500 or to imprisonment for not longer than 30 days, or both:
12 (1) makes a false statement or representation knowing it
13 to be false, or knowingly fails to disclose a material fact
14 to avoid becoming or remaining subject thereto or to avoid or
15 reduce any fair share tax or other payment required from an
16 employer under this subarticle;
17 (2) willfully fails or refuses to make fair share tax or
18 other payments required under this subarticle;
19 (3) willfully fails or refuses to produce or permit the
20 inspection or copying of records as required under this
21 subarticle; or
22 (4) willfully fails or refuses to furnish any report
23 required by section 2543 or the rules or regulations of the
24 Department of Labor and Industry.
25 (b) Number of offenses.--The number of offenses under
26 subsection (a) shall be determined as follows:
27 (1) Each false statement or representation or failure to
28 disclose a material fact shall constitute a separate offense
29 under subsection (a)(1).
30 (2) Each day of failure or refusal shall constitute a
20070H1870B2569 - 28 -
1 separate offense under subsection (a)(2), (3) and (4).
2 (3) Each report required by section 2543 or the rules or
3 regulations of the Department of Labor and Industry shall be
4 the basis of a separate offense under subsection (a)(4).
5 (c) Restitution.--In addition to any other sanction, an
6 employer, officer, agent or other person convicted under this
7 subarticle for willful failure or refusal to make a payment
8 shall be ordered to make restitution of the unpaid amounts,
9 including interest and penalty, from the date the payment was
10 due through the date of payment.
11 (d) Definition.--As used in this section, the term
12 "willfully" shall have the meaning given to it under 18 Pa.C.S.
13 § 302 (relating to general requirements of culpability).
14 Section 2550. Powers and duties of Department of Labor and
15 Industry.
16 (a) General rule.--The Department of Labor and Industry
17 shall administer and enforce this subarticle and adopt, amend
18 and rescind rules, regulations and guidance, require reports
19 from employers, employees and any other person deemed by the
20 Department of Labor and Industry to be affected by this
21 subarticle, make investigations and take other action as it
22 deems necessary or suitable. The rules, regulations and guidance
23 shall not be inconsistent with the provisions of this
24 subarticle.
25 (b) Authority.--In the discharge of the duties imposed by
26 this subarticle, the Secretary of Labor and Industry and any
27 agent authorized in writing by the secretary shall have the
28 power to administer oaths and affirmations, take depositions and
29 certify to official acts.
30 (c) Subpoenas.--The Department of Labor and Industry may
20070H1870B2569 - 29 -
1 issue subpoenas to compel the attendance of witnesses and the
2 production of books, papers, correspondence, memoranda and other
3 records deemed necessary in the administration of this
4 subarticle.
5 SUBARTICLE (D)
6 (RESERVED)
7 SUBARTICLE (E)
8 (RESERVED)
9 SUBARTICLE (F)
10 (RESERVED)
11 SUBARTICLE (G)
12 MISCELLANEOUS PROVISIONS
13 Section 2591. Regulations.
14 (a) Regulations promulgated under this article.--Except as
15 otherwise provided in this article, the promulgation of
16 regulations under this article by Commonwealth agencies given
17 the authority to promulgate regulations shall, until three years
18 from the effective date of this section, be exempt from the
19 following:
20 (1) Section 205 of the Commonwealth Documents Law.
21 (2) The Commonwealth Attorneys Act.
22 (3) The Regulatory Review Act.
23 (b) Other regulations.--If, in the determination of the head
24 of a Commonwealth agency given authority to promulgate
25 regulations under this act, rulemaking is needed for purposes of
26 the safety of patients in this Commonwealth, the Commonwealth
27 agency may promulgate a final-omitted regulation under the
28 Regulatory Review Act.
29 Section 2592. Enforcement.
30 (a) Determination of violation.--Upon a determination that a
20070H1870B2569 - 30 -
1 person licensed by the department has violated any provision of
2 this article, the department may, subject to 2 Pa.C.S. Chs. 5
3 Subch. A (relating to practice and procedure of Commonwealth
4 agencies) and 7 Subch. A (relating to judicial review of
5 Commonwealth agency action), do any of the following:
6 (1) Issue an order requiring the person to cease and
7 desist from engaging in the violation.
8 (2) Suspend or revoke or refuse to issue or renew the
9 certificate or license of the offending party or parties.
10 (3) Impose an administrative penalty of up to $5,000 for
11 each violation.
12 (4) Seek restitution.
13 (5) Impose any other penalty or pursue any other remedy
14 deemed appropriate by the commissioner.
15 (b) Other remedies.--The enforcement remedies imposed under
16 this section are in addition to any other remedies or penalties
17 which may be imposed by any other applicable statute, including
18 the act of July 22, 1974 (P.L.589, No.205), known as the Unfair
19 Insurance Practices Act. A violation by any person of this
20 article is deemed an unfair method of competition and an unfair
21 or deceptive act or practice under the Unfair Insurance
22 Practices Act.
23 (c) No private cause of action.--Nothing in this article
24 shall be construed as to create or imply a private cause of
25 action for violation of this article.
26 Section 2593. Severability.
27 (a) General rule.--The provisions of this article are
28 severable. If any provision of this article or its application
29 to any person or circumstance is held invalid, the invalidity
30 shall not affect other provisions or applications of this
20070H1870B2569 - 31 -
1 article which can be given effect without the invalid provision
2 or application.
3 (b) Limitation.--If the provisions of section 2542(b) are
4 declared invalid by a court of competent jurisdiction and the
5 decision is affirmed on its highest appeal or the appeal period
6 expires without appeal being filed, the commissioner shall
7 transmit notice of this fact to the Legislative Reference Bureau
8 for publication as a notice in the Pennsylvania Bulletin.
9 Thereafter, subsection (c) shall be effective in its place and
10 stead.
11 (c) Alternate provision.--An employer that offers health
12 care coverage to each of its employees who work 30 hours per
13 week or more following no more than 90 days of continued
14 employment during any fiscal year shall be entitled to an annual
15 credit against the fair share tax in an amount equal to 3% of
16 the employer's wages for fiscal years 2007-2008 through 2009-
17 2010, and 3.5% of the employer's wages for fiscal years
18 commencing after June 30, 2010.
19 Section 2. (1) The General Assembly declares that the
20 repeal under paragraph (2) is necessary to effectuate the
21 addition of Subarticle B of the act.
22 (2) Subject to section 3 of this act, Chapter 13 of the
23 act of June 26, 2001 (P.L.755, No.77), known as the Tobacco
24 Settlement Act, is repealed.
25 (3) All other acts and parts of acts are repealed
26 insofar as they are inconsistent with this act.
27 Section 3. Savings from repeal are as follows:
28 (1) Notwithstanding section 2(2) of this act, funds
29 appropriated under section 306(b)(1)(vi) of the act of June
30 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement
20070H1870B2569 - 32 -
1 Act, for the program established in former Chapter 13 of that
2 act shall be deposited in the CAP Fund under section 2512 of
3 the act.
4 Section 4. This act shall take effect as follows:
5 (1) The addition of sections 2511, 2512, 2513, 2514,
6 2515, 2516, 2517, 2518, 2519, 2520, 2521, 2522, 2523 and 2525
7 of the act shall take effect 30 days after publication of the
8 notice under section 2524 of the act.
9 (2) The addition of Subarticle C of the act shall take
10 effect in 30 days.
11 (3) Section 2(2) of this act shall take effect upon
12 publication of the notice under section 2524 of the act.
13 (4) The remainder of this act shall take effect
14 immediately.
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